Author: Kevin Lawrence

As we step into 2025, a noticeable trend is on the horizon: the wave of personal device upgrades. The devices that served us during the pandemic—a period marked by rapid digital adaptation—are now showing their age. Whether it’s personal computers, monitors, phones, or other gadgets, many of the tools we relied upon to navigate remote work, virtual learning, and staying connected have reached the end of their optimal lifecycle.

In this article, we’ll explore the key trends shaping consumer demand for personal device upgrades in 2025 and highlight how retailers can empower shoppers to upgrade to make the purchases they desire.

A Pandemic Boom Turning into an Upgrade Opportunity

Between 2020 and 2021, consumer demand for personal devices skyrocketed. With work-from-home setups, virtual meetings, and online schooling becoming the norm, millions invested in technology to stay connected and productive during the pandemic. Fast forward to 2025, and many of those devices are now outdated, less efficient, and struggling to keep pace with today’s software and connectivity demands.

Most device manufacturers often design hardware with a lifespan of three to five years, particularly for phones and laptops. As the devices purchased during the pandemic approach or exceed that threshold, consumers are faced with a choice: repair their aging devices, continue to tolerate diminishing performance, or upgrade to newer, faster, and more capable models.

Why 2025 Could Spark Device Upgrades

1. Evolving Tech Standards

Rapid advancements in technology are leaving older devices behind. The rollout of 5G, improved Wi-Fi 6E standards, and more power-efficient processors, brings significant gains in speed, reliability, and performance.  Upgrading to these newer models isn’t just about keeping up—it’s about unlocking smoother, faster, and more reliable technology.

2. Increasing Work and Play Demands

In the post-pandemic era, the boundary between work and personal devices has continued to blur. Hybrid work has become the norm, and the average consumer now demands optimal performance from their laptops, tablets, and smartphones to meet the dual needs of professional productivity and personal entertainment.

3. Affordability Will Shape Consumer Choices

With rising costs in many sectors, affordability will be a key driver of purchase decisions in 2025. Retailers that offer competitive prices and flexible payment options will have a distinct advantage. Retailers that provide point-of-sale (POS) financing solutions, such as 0% or deferred interest programs and that address the full credit spectrum of prime, near-prime, no-credit-required, buy-now-pay-later (BNPL) and B2B programs, are uniquely positioned for significant wins. These solutions allow consumers to spread the cost of new devices over manageable payments, making upgrades more accessible without the burden of upfront expenses.

4. Sustainability and Trade-In Incentives

Eco-conscious consumers are increasingly looking to trade in old devices in return for credit toward new purchases.  Manufacturers and retailers offering robust trade-in programs, ensuring old gadgets are recycled responsibly while making upgrades more affordable are gaining favor with sustainability-minded consumers .

5. Rising Consumer Expectations

The rise of AI, augmented reality, and other cutting-edge innovations are becoming more mainstream, but they require hardware capable of running them effectively. Devices bought in 2020 often lack the processing power or graphics capabilities to fully leverage these advancements, creating a clear upgrade imperative.

6. The Buzz Around New Product Launches

The tech world is buzzing with rumors of exciting product launches in 2025. From new foldable laptop designs and next-generation monitors to AI-integrated smartphones, this year is poised to showcase innovations that make upgrading irresistible, even for those whose devices are relatively new. .

Key Devices on the Upgrade List

• Laptops and Desktops: Aging processors, reduced battery life, and limited support for modern software are driving the need for replacements. Upgrades like faster SSDs, advanced GPUs, and improved battery performance are in high demand.

• Monitors: High refresh rates, 4K resolution, and ultrawide displays are becoming the standard for work and gaming, making older monitors feel inadequate.

• Smartphones: Foldable designs, improved camera technology, and AI-powered features are making 2025 an exciting year for smartphone enthusiasts.

• Peripherals: Keyboards, mice, webcams, and docking stations have seen wear and tear over time, pushing consumers to refresh their setups for ergonomics and better functionality.

Retailers and Manufacturers: Positioned for Success

Retailers that adopt affordability-focused strategies, such as competitive pricing, trade-in programs, and point-of-sale financing solutions, are well-positioned to thrive in 2025. By partnering with an embedded lending platform like ChargeAfter, retailers gain access to all POS financing categories and programs—including consumer-focused and B2B solutions—through a single integration.

This streamlined approach enables retailers to offer a variety of financing options, such as  buy-now-pay-later plans, installment loans, revolving lines of credit, and leasing options. These solutions make it easier for customers and B2B purchasers alike to upgrade their devices without the burden of significant upfront costs, making high-ticket purchases more accessible . These solutions not only enhance the customer experience by providing flexible payment terms but also capture consumers who might otherwise delay upgrading due to upfront costs.

By leveraging ChargeAfter’s comprehensive platform, retailers can boost sales, improve customer satisfaction, and foster long-term loyalty, all while meeting the diverse needs of modern shoppers.

Conclusion

2025 is shaping up to be a pivotal year for rethinking the technology we use every day. Whether driven by necessity, innovation, or affordability, this year could spark a significant upgrade cycle. As consumers weigh their options, one thing is certain: the devices we choose today will define how we work, play, and connect in the years ahead.

For retailers and manufacturers, this presents a golden opportunity to align their offerings with consumer needs, by prioritizing affordability, accessibility, and cutting-edge innovation.

So, will 2025 be the year you decide to upgrade? It just might be the perfect time to swap out those pandemic-era devices and step into a new era of performance and connectivity.

About Kevin Lawrence
VP Global Lender Relations – Kevin has worked in the banking and finance industry for over a decade. He has worked closely with some of North America’s largest banks, financial institutions, and retailers. Kevin is an expert in embedded consumer financing and B2B financing. He has a deep understanding of current trends and where the industry is heading.

Point-of-sale (POS) financing has become a strategic priority for retailers looking to boost customer satisfaction and increase sales. However, there are common mistakes that can hinder success. In this article we explore how to avoid these pitfalls and maximize the benefits of POS financing.

Shoppers today demand choice, personalization, and convenience in every aspect of their retail experience—yet many merchants fall short when it comes to point-of-sale (POS) financing. A recent survey by ChargeAfter highlighted that despite the integral role that POS financing plays in generating sales revenue, only 1% of merchants agree that they meet the needs of all of their customers. Recognizing the strategic importance of POS financing, 78% of merchants say that point-of-sale financing is a strategic priority for 2025. 

The current state of POS financing presents an exciting opportunity for retailers to differentiate themselves. By addressing common pitfalls and implementing smarter, more customer-centric financing strategies, merchants can not only boost approval rates and sales but also build stronger, long-term customer loyalty. 

Let’s explore the 5 most common mistakes retailers make with POS financing and how to avoid them.

The 5 Most Common POS Financing Mistakes Retailers Make

1. Working with a single lender
2. Ignoring the omnichannel experience
3. Providing a fragmented customer experience 
4. Overlooking the value of financing data to build customer loyalty
5. Adding additional lenders without using a platform

Mistake 1: Working With A Single Lender

To cater to their diverse customer base and offer the most favorable lending options, retailers must collaborate with multiple lenders catering to various credit profiles. Lenders typically specialize in specific customer segments, such as prime, near-prime, or subprime, and specific loan products like buy now pay later (BNPL), 0% APR, short/long-term installments, lease-to-own, etc. Additionally, geographical coverage is another aspect, as lenders typically only serve one region.

When a retailer relies solely on a single lender, it poses challenges. For instance, if a shopper is declined for a loan at the checkout stage, they have limited alternatives and are likely to abandon their shopping cart. This results in a lost sale and customer, as they might be deterred from future purchases. Moreover, if the lender with whom the retailer exclusively works changes their terms or ceases operations, they find themselves in a difficult situation without alternative lending options.

Research by Snap Finance published in Yahoo finance in March 2024 reveals that almost 50% of consumers with credit challenges will avoid purchasing from stores that do not supply them with financing options. 

Mistake 2: Ignoring the Omnichannel Experience

It’s often said that one should never put all their eggs in one basket, and this is especially true when it comes to the sales experience. Customers are, in the end, individuals with different preferences when making purchases. It is important to offer a consistent experience regardless of how the consumer engages with your business.

Whether your customers are using an app, website, or physical store, they should enjoy a consistent experience, including when it comes to point-of-sale financing, regardless of how they choose to access your services. Shoppers who rely on financing to make a big-ticket purchase, for example buying furniture, will likely prefer to apply for financing online from home before heading to the store with their pre-approval to complete their purchase. This translates into other purchases that customers know they can’t access without financing and where they want to avoid the embarrassment of in-store declines.

To provide a seamless omnichannel experience, it is equally essential to strategically offer point-of-sale financing options across various customer interaction points, not merely at checkout. In-store, this can include QR codes that are displayed throughout the store where customers can apply in advance on their mobile devices, as well as at self-checkout, or at traditional checkouts.

Mistake 3: Providing a fragmented customer experience

While an omnichannel financing experience is critical, it isn’t the only barrier to a fragmented customer journey. When retailers fail to establish a streamlined process for loan applications and approvals, especially when integrating more than one lender into their offer, the result is a frustrating experience for customers. 

Consider a shopper applying for a loan at the point of sale, which gets declined. If the retailer offers more than one lending option, the customer who wants to continue looking for a loan has to start the application process all over again with a different lender. This repetition not only adds unnecessary inconvenience and time consumption for the customer but also creates a sense of frustration and confusion.

This poor experience leads to customer dissatisfaction, a loss of trust in the retailer, and potential purchase abandonment. Retailers should prioritize integrating their financing options into a single platform to establish a cohesive process that ensures a seamless customer experience, minimizing the need for multiple loan applications and reducing the likelihood of customer frustration and disengagement.

Jerome’s Furniture, a discount furniture chain store in Southern California, achieved a 67% increase in consumer financing adoption with high approval rates by embracing consumer financing as part of the customer journey with ChargesAfter’s embedded lending platform.

Mistake 4: Overlooking the value of financing data to build customer loyalty 

Data about customer financing is an invaluable asset that can help retailers make informed decisions across various aspects of their operations. By harnessing insights derived from customer financing data, retailers can enhance their marketing strategies, identify upselling opportunities, and optimize their lenders.

Customer financing data provides a comprehensive understanding of customer purchasing behavior and preferences. By analyzing this data, retailers gain insights into which products are most commonly financed, the preferred financing options, and the specific factors influencing customers’ decisions. With this knowledge, retailers can tailor their marketing strategies to target the right audience, showcase relevant products, and optimize promotional campaigns to resonate with customers’ financing preferences.

Access to individual shoppers financing data is a powerful way for retailers to build personalized customer relationships and highlights upselling opportunities. By analyzing shoppers purchasing patterns and financing histories, retailers can identify customers who have previously financed products and can invest in higher-priced items. With this information, retailers can personalize their sales approach, offer attractive financing options, and guide customers toward upgrading their purchases. This boosts revenue and enhances customer satisfaction by providing tailored recommendations based on their financial capabilities.

Moreover, retailers can leverage financing data to collaborate with lenders and optimize partnerships that provide their customers with the most successful financing options.

Mistake 5: Adding additional Lenders without using a platform 

Adding additional lenders without using a point-of-sale (POS) platform contributes to a poor customer experience and makes managing post-sale processes such as refunds, reconciliations, and disputes exceptionally complicated. Without a centralized system, each lender operates independently, making it difficult to streamline and coordinate these critical activities. 

Without an embedded lending platform, managing post-sales transactions becomes a cumbersome process. Each lender may have different refund policies, procedures, and timelines, making it hard to ensure consistent and efficient processing. Reconciling transactions across multiple lenders becomes equally complex, as there is no centralized mechanism to track and match payments, leading to potential errors and discrepancies.

Handling disputes becomes a more arduous task as well. Without a unified platform, resolving issues requires interacting with each lender separately, prolonging the resolution process and causing frustration for customers and retailers. The lack of streamlined communication channels and standardized dispute-resolution procedures can result in inconsistent outcomes and an unsatisfactory customer experience.

Additionally, compliance becomes more complicated without a platform. Each lender may have its own regulatory requirements, and managing and ensuring adherence to these varied compliance standards can be daunting. This increases the risk of non-compliance and potential legal issues for lenders and merchants.

Conclusion – A platform-first solution

Retailers are increasingly partnering with ChargeAfter to simplify their financing operations and eliminate the common pitfalls of point-of-sale financing. By embedding multiple lenders into a single, easy-to-manage platform, ChargeAfter enables merchants to deliver a seamless and efficient financing waterfall experience for their customers. With this approach retailers can achieve approval rates of up to 85%, meeting the needs of shoppers across the credit spectrum. 

Beyond customer benefits, the platform simplifies post-sale processes by consolidating lender relationships, streamlining workflows, and reducing administrative burdens.

About Kevin Lawrence
VP Global Lender Relations – Kevin has worked in the banking and finance industry for over a decade. He has worked closely with some of North America’s largest banks, financial institutions, and retailers. Kevin is an expert in embedded consumer financing and B2B financing. He has a deep understanding of current trends and where the industry is heading.

Point-of-sale (POS) financing is more than just a flexible way for customers to pay—when implemented effectively, it creates a symbiotic relationship between merchants, lenders, and customers, with each party benefiting. 

Driving this transformation is the rise of embedded lending technology, which is successfully bridging the gap between merchants, lenders, and customers. We’ll explore how this win-win-win relationship unfolds when POS financing is executed with the right partnerships, strategies, and technology.

Merchants: Driving Sales and Building Loyalty

For merchants, offering POS financing is no longer optional—it’s a strategic priority. Customers increasingly expect flexible payment options at checkout, whether in-store, online, via mobile apps, in call centers, or even in-home. By leveraging a platform-first approach and partnering with the right lenders, merchants can easily drive sales and build loyalty. A successful POS finance strategy provides the following benefits:

• Expands access: Collaboration with lenders across the credit spectrum ensures financing is available to a wide range of customers, regardless of credit profile. 
• Boost sales: Financing options increase customers’ purchasing power, with the potential to drive higher average order values (AOV) and reduce cart abandonment.
• Enhance loyalty: Seamless, personalized financing solutions create a positive shopping experience, encouraging repeat business. 
• Secure better terms and control: Access to multiple lenders allows merchants to negotiate terms, fostering competition among lenders and giving merchants greater control over the financing options they offer.

Lenders: Reaching More Customers

Lenders are a crucial piece of the puzzle. By partnering with relevant merchants they gain access to their customer base at the exact moment of need. When partnering through a platform, lenders benefit from:

• Broader reach: Collaboration with merchants introduces lenders to new customers who are in the market to purchase the goods or services the lender specializes in.
• Increased approval opportunities: By being part of a waterfall that covers diverse credit tiers, lenders can instantly match their offerings to qualified borrowers, maximizing approval rates and business potential.
• Efficient operations: POS financing platforms simplify integration with multiple merchants, allowing lenders to focus on their core business of lending.

Customers: Flexible, Accessible Payment Options

At the center of the POS financing model is the customer. A well-executed POS financing solution addresses customers’ growing expectations for personalization, convenience, flexibility, transparency, and choices. Customers benefit in several ways:

• Increased choices: Financing choices clearly presented mean that customers are more likely to find terms that suit their financial needs and make confident and informed decisions.
• Transparency and trust: Clear terms, quick approvals, and the ability to manage payments foster trust and satisfaction.
• Seamless experience: Whether shopping online or in-store, customers enjoy a consistent and unified financing experience. From browsing online to checkout, wherever the purchase is completed, the process is streamlined and intuitive, reducing friction and encouraging repeat purchases.

The Role of Technology in Enabling Collaboration

A point-of-sale financing platform enables real-time credit decisions, seamless integration across channels, and partnerships with multiple lenders to ensure that every customer has access to tailored financing options. It acts as the glue that connects merchants, lenders, and customers. These platforms provide the infrastructure and insights necessary for seamless collaboration, including:

• Omnichannel integration: Ensuring financing is available at every point of sale—online, in-store, and mobile.
• Real-time approvals: A matching engine that waterfalls and routes customers to the best lender for their credit profile, maximizing approval rates and streamlining the financing process.
• Analytics and Post-Sale Insights: A platform provides detailed analytics that help merchants and lenders understand customer behavior and financing trends, driving repeat purchases and long-term customer satisfaction.

Achieving the Win-Win-Win

When merchants, lenders, and customers work together within a well-designed POS financing ecosystem, everyone wins:

• Merchants see higher sales and customer loyalty.
• Lenders expand their reach and drive profitable growth.
• Customers gain access to flexible, convenient financing options that enhance their shopping experience and purchasing power.

This synergy is what makes POS financing a powerful tool in today’s retail landscape. Businesses that embrace this collaborative approach will exceed customer expectations and build stronger, more sustainable relationships across the value chain.

Ready to create a win-win-win for your business? Contact us to learn more about how ChargeAfter can help you unlock the power of POS financing.

About Kevin Lawrence
VP Global Lender Relations – Kevin has worked in the banking and finance industry for over a decade. He has worked closely with some of North America’s largest banks, financial institutions, and retailers. Kevin is an expert in embedded consumer financing and B2B financing. He has a deep understanding of current trends and where the industry is heading.

Merchants are gearing up for Black Friday, which this year falls on November 29. A key focus is meeting the demands of customers opting for omnichannel shopping and alternative payments like point-of-sale (POS) financing. This article explores Black Friday trends and how merchants can enhance the customer experience through POS financing.

Key article takeaways

1. Black Friday 2024 sales are projected to surpass $222 billion. Shoppers using POS financing are expected to spend significantly more than buyers using traditional payment methods.
2. 78% of merchants recognize POS financing as a strategic priority with enhancing the omnichannel customer experience being a top priority. 
3. A seamless POS financing solution should integrate effortlessly across all sales channels. Additionally, it should support a broad lending network and leverage waterfall financing to boost approval rates. The platform should simplify management through real-time data and automated processes.

Key 2023 Black Friday statistics

Despite inflationary pressures, Black Friday consumer spending continues to grow. In 2023:

• U.S. retail sales on Black Friday rose by 2.5% year-over-year. This reflects steady consumer demand across both in-store and online channels, ​(Mastercard).
• U.S. online sales on Black Friday surged to a record-breaking $9.8 billion in 2023. This reflects a 7.5% increase compared to the previous year (PYMNTS).
• In-store Black Friday shopping rose by 1.5% year-over-year. Despite the growth of online sales, most purchases are made in person (Pew Research).  

If these trends continue, we can expect even greater synergy between digital and physical retail experiences. Omnichannel strategies will become essential for merchants to capture shoppers whether they are online, in-store, or combining both.

Credit Bloggers Passion

How POS financing is shaping Black Friday

Black Friday’s sales figures provide insights into the nation’s economic trajectory, consumer confidence, and spending patterns. In 2023:

• The average holiday shopper spent approximately $533. Those who opted for POS financing options spent 48% more than shoppers using traditional payment methods (PYMNTS).
• POS financing usage grew by 72% in the week leading up to Black Friday (PYMNTS).
• According to Adobe Analytics, POS financing on Black Friday 2023 saw a 47% increase compared to 2022 (Business Insider)

These trends highlight the growing importance of POS financing to buyers. They also explain why merchants lean towards a waterfall financing model, which offers choice and personalization to customers.

How to implement the best POS financing solution

Despite the rising demand for point-of-sale financing, many retailers still offer fragmented solutions. This results in a disjointed customer experience and complicates management processes. Recognizing the critical role of financing in driving sales, 78% of merchants state that point-of-sale financing is a strategic priority for the next 12 months (ChargeAfter). When upgrading POS lending capabilities, merchants’ top priorities center around the omnichannel customer experience. 40% prioritize improving in-store functionality and 37% aim to optimize the overall customer journey. To achieve this, they need to find a solution that incorporates the following capabilities. 

Network of lenders

Shoppers expect unprecedented levels of choice, personalization, and convenience. To achieve comprehensive financing at the point of sale, merchants must offer options from multiple lenders. This allows them to cover the full credit spectrum—prime, near-prime, and no-credit-required—while providing a range of financing products, from installments to revolving credit and lease-to-own, across multiple geographies. Additionally, the broader your lender network, the better protected you are from disruptions caused by changes made by individual lenders.

Waterfall finance capabilities

Waterfall financing is a process where shoppers apply for financing with a single application, and are evaluated according to a tiered system to match them with the best-fit financing choices. First, they are assessed by prime lenders, if they are not approved, their application instantly flows to near-prime lenders, and then to subprime lenders or lease-to-own providers. This happens in real-time and ensures more customers have access to financing, leading to up to 85% approval rates.

Simple management and data processes 

Implementing a seamless POS financing solution goes beyond offering diverse payment options—it’s also about simplifying management. Merchants need a solution that integrates effortlessly across in-store, eCommerce, call center, and even in-home environments. Look for platforms that support fast integration with major eCommerce platforms, offer flexible in-store solutions like QR code scanning and self-checkout, and provide API and SDK kits to personalize the online checkout experience.

Additionally, for merchants, real-time updates on financing performance, order information, and customer engagement are essential. A well-designed solution should offer features like automated post-sale management, including dispute resolution, refunds, and reconciliation, as well as data and analytics. This ensures that retailers not only streamline their sales processes but also have direct access to insights that help optimize their financing programs over time.  

Want to talk about POS financing?

About Kevin Lawrence
VP Global Lender Relations – Kevin has worked in the banking and finance industry for over a decade. He has worked closely with some of North America’s largest banks, financial institutions, and retailers. Kevin is an expert in embedded consumer financing and B2B financing. He has a deep understanding of current trends and where the industry is heading.

For merchants selling to business customers, offering a robust point-of-sale B2B financing offer leads to improved customer acquisition, customer retention, and business growth. Traditionally, retailers have struggled to provide financing options that meet the needs of small and medium-sized business customers, as most B2B financing providers offer net terms that are only suitable for large companies. However, this is changing.

What’s changing in point-of-sale B2B financing

Point-of-sale B2B financing is undergoing a transformation, driven by technological advancements and the emergence of fintech lenders who are addressing the unique needs of SMBs. Unlike traditional financing providers that offer limited and inflexible terms, these new entrants provide more adaptable and accessible financing solutions. SMBs seek terms that extend to 12 months, and beyond. They want to apply and buy quickly with instant credit decisions that reflect their experience as individual consumers. New players such as Credit Key and Tabit present such an opportunity. When integrated into an embedded lending platform, such as ChargeAfter, they enable merchants to seamlessly offer SMBs access to the capital they need to grow and compete more effectively right at the point of sale.

“B2B transactions have many unique requirements including split shipments, customer-specific pricing, invoicing, in-house lines of credit, and flexible payment terms. Combine that with a complex omni-channel experience and manual approval processes that depend on legacy systems, and you have a recipe for a massive delta in customer experience expectations.  Through our partnership with ChargeAfter, merchants can provide the B2C experience that customers expect for their B2B customers in ALL of their sales channels.” James R Wallen, Vice President of Sales, Credit Key

Key B2B lending challenges to overcome

There are specific challenges in B2B financing that make it difficult to provide, especially to smaller businesses. Understanding these complexities emphasizes how valuable it is when retailers get it right.

• Larger and more complex transactions: B2B transactions often involve bulk purchases, customer-specific pricing, split shipments, unique invoice requirements, and integrations to back office and ERP systems.
• Use of traditional credit and financing options: Many businesses rely on familiar, traditional payment options such as Net Terms which are ubiquitous in B2B, overlooking innovative funding solutions, which dramatically increase revenue and share of wallet to the merchant
• Longer risk and compliance assessment processes: Assessing business creditworthiness is more intricate and time-consuming than evaluating individual credit scores. Data that is available to assess risk for small and medium-sized businesses is limited and fragmented leading to long, cumbersome processes to open a new account.

“Business owners expect a seamless customer journey, mirroring their experiences as customers. This includes access to point-of-sale financing solutions suitable for different types of businesses at the point-of-sale.” Elias Beaino, Executive Vice President of Tabit by Merchant Growth.

Benefits of advanced B2B financing solutions

There are many benefits to meeting the needs of SMB customers, they include:

• Enhanced customer acquisition and retention: By offering flexible financing options, merchants can attract more business customers who might otherwise be unable to afford large purchases upfront. This not only boosts customer acquisition but also fosters loyalty, as customers appreciate the support in managing their cash flow.
  
• Increased sales and revenue: With better financing options, SMBs are more likely to make larger purchases, thereby increasing the average transaction value. This translates to higher sales and revenue for merchants.
  
• Streamlined operations: Modern B2B financing solutions often come with integrated platforms that automate and simplify the financing process. This reduces the administrative burden on merchants and allows them to focus more on their core business activities.
  
• Improved cash flow management: For SMBs, managing cash flow is crucial. By using the lender’s funds to purchase inventory, merchants can preserve their working capital for other essential business operations, such as marketing, hiring staff, or expanding their business, ensuring they can maintain operations without financial strain. 

The platform-first approach

The easiest and most efficient way to offer lending options to your business customers is through an embedded lending platform. With a platform-first approach, retailers easily manage their entire point-of-sale financing offer customized for businesses as well as for their individual customers in a single platform. Benefits of a platform-first approach to point-of-sale B2B financing include:

• Fast access to multiple B2B and B2C financing options.
• Exceptional customer financing journey in seconds.
• Centralized management of lending and post-sales activities.
• Embedded regulatory and compliance requirements.
• Customizable point-of-sale checkout with white labeling.
• Enhanced customer and lender relationships.
• Improved approval rates, sales conversion, and order value.

The transformation within the B2B financing sector is driven by the adoption of new technologies, innovative market players, and customer-centric solutions. These advancements streamline processes and introduce greater flexibility and efficiency. Embracing these changes allows businesses to enhance financial strategies, improve customer relations, and secure a sustainable competitive advantage.

About Kevin Lawrence
VP Global Lender Relations

Kevin has worked in the banking and finance industry for over a decade. He has worked closely with some of North America’s largest banks, financial institutions, and retailers. Kevin is an expert in embedded consumer financing and B2B financing and has a deep understanding of current trends and where the industry is heading.

In recent years, POS financing has emerged as a game changer, enabling merchants to meet the demand for flexible financing solutions embedded within the purchasing journey. This growing demand is a result of multiple factors, including the emergence of new fintech lenders that have entered the market with competitive terms, a challenging economy for consumers, and younger Americans rejecting credit cards.  

This next wave of credit not only enhances consumers’ purchasing power but also opens new strategic avenues for merchants to increase sales and foster customer loyalty. With various POS financing solutions available, understanding and integrating suitable options can significantly impact your sales strategy.

What is POS financing?

POS financing, or point-of-sale financing, refers to lending options available to customers at their moment of need in the purchasing process. Unlike traditional financing, which often involves lengthy application processes and extensive paperwork, POS lending offers instant loan approvals directly at checkout, bridging the gap between customer desire and purchase capability.

Types of POS Financing

The landscape of POS financing is diverse, offering several tailored options to meet the varied needs of businesses and consumers. POS financing covers different types of lending products that cover the full credit spectrum. Merchants that want to provide their customers with a robust POS financing experience embed different types of financing options into their points of sale to increase approval rates to up to 85%.

0% APR Financing

0% APR programs allow customers to make purchases without incurring any interest during a specified period making them an appealing financing option.  Consumers can buy a product immediately and pay back the cost over time, but unlike traditional loans, they are not charged any interest, provided the repayment is completed within the agreed timeframe. This type of financing is particularly beneficial for purchasing big ticket items, as it makes them more financially accessible and manageable for the consumer. Retailers often use 0% APR offers as an incentive to encourage higher sales and attract budget-conscious customers, enhancing both the affordability of their products and the attractiveness of their sales proposition. By offering a cost-effective way to spread out payments, 0% APR loans at the point of sale can significantly improve the purchasing power of consumers, while simultaneously driving business growth and customer loyalty.

Consumer BNPL (Buy Now, Pay Later)

Buy Now, Pay Later (BNPL) is a flexible payment solution that has revolutionized the retail industry in recent years. BNPL allows consumers to divide the total purchase price into smaller, more manageable installments, often with the initial payment due at the time of purchase and the rest spread over a short period. The key appeal of BNPL lies in its accessibility and convenience: customers can acquire goods immediately, from everyday items to more substantial purchases, without the upfront financial burden. This method is especially attractive for those who need or want products immediately but prefer not to exhaust their savings or use traditional credit options. For retailers, offering BNPL can significantly boost sales, attract a broader customer base, and improve customer satisfaction by providing a flexible and customer-friendly payment alternative. By aligning with modern spending habits and offering immediate gratification with delayed payment, BNPL is a powerful tool for enhancing both consumer purchasing power and business growth.

Business BNPL

B2B financing, tailored specifically for business-to-business transactions, plays a crucial role in smoothing the financial interactions between companies. This form of financing addresses the unique needs of businesses, offering them more flexible payment terms and credit options for purchasing goods or services. B2B financing often involves larger purchases and  repayment periods ranging from 30 days to 12 months or more. It is designed to enhance cash flow management for both buyers and sellers, enabling businesses to maintain operational efficiency without the immediate financial strain of large purchases. This can be particularly beneficial for smaller businesses that may not have extensive capital reserves. By facilitating easier and more manageable trade, B2B financing strengthens business relationships, fosters long-term collaboration, and supports the overall growth and stability of the business ecosystem. For companies looking to invest in equipment, inventory, or services to expand their operations, B2B financing offers a vital resource to achieve these goals without disrupting their financial health.

Lease-to-Own 

Lease-to-own is an innovative payment solution that blends elements of leasing and purchasing, offering consumers and businesses a flexible pathway to ownership. This option allows customers to lease a product—often electronics, furniture, or appliances—for a set period, with the opportunity to purchase the item at the end of the lease term. During the leasing period, customers make regular payments, similar to a rental agreement, but with the added advantage of having the option to own the product outright eventually. This arrangement is particularly appealing for those who need immediate use of an item but may not have the funds for a full purchase upfront or are uncertain about committing to a direct purchase. It’s also beneficial for products that rapidly evolve or depreciate, like technology gadgets, where consumers might prefer to test or use the product before deciding on a full investment. For retailers, offering lease-to-own options can attract a wider range of customers, including those who are credit challenged, and can lead to increased sales, customer loyalty, and market reach. This purchasing method not only enhances accessibility to products but also provides consumers with the financial flexibility to manage their budgets effectively while enjoying the benefits of the leased items.

Installment loans

Installment loans offer a robust financing solution for consumers and businesses making big-ticket purchases, allowing them to spread the cost over an extended period. This type of loan is particularly suited for high-value one-time purchases such as fitness equipment, elective medical procedures and home improvement projects, where paying the full price upfront can be financially daunting. With long-term installment loans, the total cost is divided into smaller, manageable payments, typically made monthly. This approach not only makes expensive purchases more accessible but also helps in budgeting and financial planning, as repayments are predictable and spread out over time. The extended duration of these loans, which can range from 6 months to  several years, reduces the monthly financial burden on the borrower, making it easier to manage alongside other financial commitments. For retailers, practitioners and contractors, offering long-term installment loans can broaden their customer base to include those who prefer or require a more extended repayment plan. It’s an effective strategy to increase sales of higher-priced items while also building customer trust and loyalty, as it demonstrates a commitment to providing flexible financial solutions. By accommodating the diverse financial situations of customers, installment loans play a pivotal role in making significant investments more attainable and financially sustainable.

Revolving line of credit

Revolving lines of credit (revolving credit) offer a dynamic and flexible financing option, particularly useful for consumers and businesses seeking repeat purchases. Unlike traditional loans with a fixed amount and a set repayment schedule, a revolving line of credit provides a predetermined credit limit that customers can draw from, repay, and reuse as needed. This flexibility is key: it allows users to borrow exactly what they need, when they need it, up to the limit of the credit line. Interest is typically charged only on the amount borrowed, not on the entire credit limit, making it a cost-effective option for managing fluctuating financial needs.

Retailers and service providers offering a revolving line of credit can enhance customer loyalty by providing a reliable, reusable financial resource. This not only improves the customer experience by offering financial flexibility but also encourages repeat transactions, as the ease of access to credit can facilitate ongoing purchasing decisions. By aligning with the financial needs and preferences of customers, revolving lines of credit represent a versatile and strategic approach to consumer and business financing.

Choosing the right POS financing option

When selecting the right type of POS financing for your customers, it’s crucial to consider their specific needs, purchasing behaviors, and the nature of your products or services. Start by analyzing your customer base: Are they typically making large, one-time purchases, or do they prefer smaller, recurring transactions? Understanding this dynamic helps in choosing between options like BNPL for immediate, smaller purchases or long-term installment loans for big ticket items. Additionally, consider the speed and convenience of the application process, as this can greatly influence customer satisfaction. For businesses, B2B financing might be more appropriate, while consumers might prefer the flexibility of lease-to-own options for certain goods. The key to a successful POS financing strategy lies in offering a range of options to cater to diverse customer needs. 

Adopting a platform-first approach is highly effective in this context. By integrating a POS lending platform, you can embed multiple financing options into your point of sale. This not only provides customers with a variety of choices but also streamlines the financing process, making it more efficient and user-friendly. Such a system allows for a seamless combination of different financing methods, such as revolving credit lines for larger purchases and BNPL for smaller purchases, ensuring that each customer finds a solution that best fits their financial situation. Ultimately, a platform-first approach offers the flexibility and adaptability needed to meet the evolving demands of both your business and your customers, leading to enhanced customer satisfaction and potentially higher sales volumes.

Future of POS financing

The future of POS financing is to empower the consumer to make purchases at the point of decision, whenever and wherever that might occur.. The increasing shift towards omnichannel, digital, and mobile platforms, will likely lead to more integrated and user-friendly POS financing options within online and in-person and even combined shopping experiences. Additionally, there’s a potential for diversification in financing options, such as the incorporation of flexible payment plans tailored to individual consumer needs or the introduction of new financing models that could include more peer-to-peer elements or blockchain technology.

Another important trend is the growing consumer demand for transparency and simplicity in financing. This could lead to more straightforward, easy-to-understand financing options with clear terms and conditions, catering to a market that values financial clarity. Furthermore, the rising emphasis on financial inclusivity might drive the expansion of POS financing to cover a broader range of products and services, making it accessible to a wider segment of the population.

Finally, regulatory changes and an increased focus on consumer protection could shape the future of POS financing, potentially leading to more standardized practices across the industry. These changes will not only enhance the customer experience but also provide businesses with new opportunities to innovate in their sales and financing strategies, ensuring that POS financing remains a vital component in the evolving landscape of consumer purchasing.

Conclusion

In conclusion, POS financing has evolved to a multiple-lender model, employing the concept of waterfall financing within an embedded lending platform. This innovative approach will revolutionize the way businesses and consumers interact with financing options. By integrating a variety of lenders into a single, seamless platform, merchants can offer a more diverse range of financing solutions, ensuring that there’s a fit for every customer’s unique financial situation. The waterfall financing aspect further enhances this model, as it systematically routes customer applications through different lenders based on predefined criteria, thereby increasing approval rates and providing customers with the best possible financing terms. This embedded lending platform not only simplifies the financing process for customers but also for merchants who benefit from a single platform for all their POS financing management. Looking ahead, the adoption of a comprehensive, customer-centric approach in POS financing will be a key driver in the evolution of consumer purchasing experiences, marking a leap forward in the intersection of finance and retail.

About Kevin Lawrence
VP Global Lender Relations

Kevin has worked in the banking and finance industry for over a decade. He has worked closely with some of North America’s largest banks, financial institutions, and retailers. Kevin is an expert in embedded consumer financing and B2B financing and has a deep understanding of current trends and where the industry is heading.

When it comes to evaluating a POS lender for your business, merchants, service providers, and contractors typically focus on two metrics – approval rates and cost.

Pricing is straightforward to assess, but what about approval rates? Are they a reliable metric for comparing financing programs?  

While approval rates are essential, they are only part of the story. If upgrading your point-of-sale financing experience is on your agenda, there are additional factors that you should consider to evaluate finance providers uniformly.  

1.  POS financing approval rates
2.  Approval amount
3.  Loan terms & conditions
4.  Does the financing amount offered meet the sale amount

A summary of each is provided below.

POS Financing Approval Rates 

What does it mean if a point-of-sale finance provider indicates they have an approval rate of 80%? Are they referring to ecommerce applications? Perhaps they are talking about in-person or in-store applications. The consumer finance provider likely has different underwriting strategies for each channel that affect approval rates for that channel. Given this complexity, a better indicator would be approval percentages by consumer fico tier and channel(s) as appropriate.  

Approval Amount

Another important factor when selecting a consumer lending partner is whether their minimum and maximum loan amounts align with your ticket requirement. For example, if your average ticket is less than $300, you are probably focused on BNPL providers. If the average ticket is $3,000, deferred interest options like 0% interest and extended terms will be critical.  

Loan Terms & Promotions

The most popular POS lenders bring extra value to the table beyond just cost, approval rates and approval amounts.  These providers act as a cousultant and advise you about trends and best practices in consumer finance. Consider the added value of a partner that can explain the benefits of a deferred interest program versus equal payments with no interest or why installment loans might be better than revolving lines of credit for your customers.

Financing Offered Meets the Sale Amount

This is one of the most critical, but often overlooked, metrics when choosing the best lending partner for your business.

You need to understand the percentage of the lender loan offers that equals or exceeds the purchase amount requirement. Having a high approval rate is great, but what good is a loan offer that doesn’t allow the consumer to make the purchase?
For example, how helpful is it to offer your customers a $1,500 loan when trying to sell a treadmill for $2,500?

Purchase Conversion Rate

The Purchase Conversion Rate is arguably the most important metric and answers whether a finance program will drive sales.  

The conversion rate is the percentage of offers accepted by the consumer and utilized to make a purchase. Factors that impact conversion rate can include:

• Is the consumer redirected from the merchant website to apply?
• Is there a seamless transition from one program to another if the consumer is declined?
• Are the repayment terms and conditions agreeable?

If the consumer experiences friction anywhere in the purchase process, they are more likely to drop out and abandon the cart.
A seamless customer journey with agreeable terms and conditions is more likely to result in a purchase. 

The Embedded Lending Platform Advantage

One of the major advantages of ChargeAfter’s embedded lending platform is the ability to provide merchants with these analytics and much more. Merchants can view the performance of each lending partner in a single console and on a near real-time basis.  

With this data, merchants are empowered with the tools they need to better evaluate the performance and effectiveness of their lending partners, identify any gaps in consumer coverage, evaluate new promotion offers, and even perform A-B testing with various lenders.  

ChargeAfter operates the largest network of lending partners offering installment loans, private label credit cards, revolving lines of credit, BNPL, subprime lending, lease-to-own, and even B2B financing. A single integration with ChargeAfter provides you with access to all of the programs and tools you need to maximize finance penetration.

 

About Kevin Lawrence
VP Global Lender Relations

Kevin has worked in the banking and finance industry for over a decade. He has worked closely with some of North America’s largest banks, financial institutions, and retailers. Kevin is an expert in embedded consumer financing and B2B financing and has a deep understanding of current trends and where the industry is heading.